Thread: Panel proposes $3.8 TRILLION savings plan, S.S. changes

Panel proposes $3.8T savings plan, Social Security changes

Updated 5m ago
By Richard Wolf, USA TODAY

WASHINGTON — The leaders of a federal commission charged with finding ways to reduce the government's $13.7 trillion debt Wednesday recommended more than $3.8 trillion in savings over the next decade.

The proposal includes sweeping changes to Social Security, the elimination of popular tax breaks and subsidies for special interests, and nearly $1.5 trillion in "illustrative" cuts from defense and domestic spending programs.


FEDERAL SPENDING: Obama panel proposes $200B in cuts
SALARIES: More federal workers pay tops $150K

The panel's chairmen, Democrat Erskine Bowles and Republican Alan Simpson, began trying to sell the plan to their 16 commission members Wednesday, three weeks before the panel must report its findings and recommendations to President Obama on Dec. 1.

"America cannot be great if we go broke," their proposal says. "Our economy will not grow and our country will not be able to compete without a plan to get this crushing debt burden off our back."

For any of the proposals to reach Congress, 14 of 18 commission members must agree — a high bar, considering six were named by congressional Democrats and six by Republicans.

Because of the weak economy, the co-chairmen recommended that none of the proposals take effect until 2012.

Highlights of the plan include:

• Future changes to Social Security designed to ensure its solvency for 75 years, rather than 27 years as currently designed. Wealthier recipients would get less in benefits, wealthier workers would pay more in payroll taxes, and the retirement age would be raised to 69 by 2075.

To make the plan more palatable, a new special minimum benefit would be added to keep minimum-wage workers who completed their careers above the poverty threshold in retirement.

• Eliminating more than $1 trillion in tax breaks and subsidies. This would contribute to deficit reduction while also enabling lawmakers to lower some tax rates and simplify the tax code.

Under one option, the top rate for individuals could be cut from 35% to 28%, and to 26% for corporations. The alternative minimum tax, used to ensure that upper-income taxpayers don't avoid taxes completely, would be eliminated. The federal gas tax, now 18.4 cents a gallon, would be increased gradually by 15 cents.

• About $200 billion in annual spending reductions, equally divided between defense and domestic programs. Weapons systems would be cut, earmarks for parochial projects eliminated, and the federal workforce would forfeit jobs, pay levels and benefits.

Spending would be capped in 2012 at this year's levels, then reduced 1% a year through 2015 before being indexed to inflation.

Other savings include reductions in health care payments to doctors, lawyers, drug companies and others. Patients would pay slightly more in deductibles and copayments.

Farm subsidies would be slashed by $3 billion a year. Interest costs would be slashed by $673 billion over the decade.

Savings would grow over time, from $69 billion in 2012 to $372 billion in 2015 and $761 billion in 2020. Taken together, the proposals would reduce the debt to 60% of the nation's economy, considered an acceptable level, by 2024. By 2037, the budget would be balanced.

Commission member Andy Stern, who retired this year as president of the Service Employees International Union, said the proposals include "lots" of objectionable provisions. Still, he said, "It's not as if doing nothing is a really great option either."

http://www.usatoday.com/news/washington ... rity_N.htm

Here's my plan: 1) federal employees are paid the same as civilian employees for comparable jobs; 2) congress participates in Social Security and Medicare instead of their gold plated retirement and health plans; 3) the government quits spending money on really stupid projects, like snail crossings; 4) Obama stays home instead of traveling the globe in luxury.

Take all the money Obama and wife wasted on his "going home" vacation he just got back from....................and divide it between the senior citizens who have paid into social security for years. That should be enough to keep the old people from starving for the next 20 years!!!

Stop giving social security to all the illegal aliens ......who have never contributed a dine ............

Stop giving disability to people who have a "back" problem but are able to work.

My solution is to close the borders and enforce the provisions of the 1986 IRCA and it's 5 revisions.. Taxpayers spend 500 billion dollars annually on healthcare, welfare, food stamps, wic, education, section 8 housing, energy assistance, unemployment insurance, other benefits for and incarceration of illegal aliens. The figure increases as thousands more illegally cross the border every week. It is simple logic. We can't be the world's healthcare, welfare, education and employment agency with limited resources and open borders. It is a matter of math, supply and demand and logic.

Originally Posted by ReggieMay

Here's my plan:
1) federal employees are paid the same as civilian employees for comparable jobs;
2) congress participates in Social Security and Medicare instead of their gold plated retirement and health plans;
3) the government quits spending money on really stupid projects, like snail crossings;
4) Obama stays home instead of traveling the globe in luxury.

Q5: Is it true that members of Congress do not have to pay into Social Security?

A: No, it is not true. All members of Congress, the President and Vice President, Federal judges, and most political appointees, were covered under the Social Security program starting in January 1984. They pay into the system just like everyone else. Thus all members of Congress, no matter how long they have been in office, have been paying into the Social Security system since January 1984.
(Prior to this time, most Federal government workers and officials were participants in the Civil Service Retirement System (CSRS) which came into being in 1920--15 years before the Social Security system was formed. For this reason, historically, Federal employees were not participants in the Social Security system.)

Employees of the three branches of the federal government, were also covered starting in January 1984, under the 1983 law--but with some special transition rules.

1) Executive and judicial branch employees hired before January 1, 1984 were given a one-time irrevocable choice of whether to switch to Social Security or stay under the old CSRS. (Rehired employees--other than rehired annuitants--are treated like new employees if their break-in-service was more than a year.)

2) Employees of the legislative branch who were not participating in the CSRS system were mandatorily covered, regardless of when their service began. Those who were in the CSRS system were given the same one-time choice as employees in the executive and judicial branches.

3) All federal employees hired on or after January 1, 1984 are mandatorily covered under Social Security--the CSRS system is not an option for them.

So there are still some Federal employees, those first hired prior to January 1984, who are not participants in the Social Security system. All other Federal government employees participate in Social Security like everyone else.

This change was part of the 1983 Amendments to Social Security. You can find a summary of the 1983 amendments elsewhere on this site.

http://www.ssa.gov/history/hfaq.html

Q.Does congress pay into medicare?

A. Members of Congress pay FICA/Medicare. They also pay health insurance premiums at rates comparable to the private sector.

http://wiki.answers.com/Q/Does_congress ... o_medicare

$4 trillion in deficit cuts proposed

By Jeanne Sahadi, senior writer
November 10, 2010: 4:20 PM ET

NEW YORK (CNNMoney.com) -- In a surprise move Wednesday, the co-chairmen of President Obama's fiscal commission released their preliminary proposals to curb growth in U.S. debt.

The report from Erskine Bowles and Alan Simpson recommends spending cuts beginning in 2012, as well as tax reform and other ways to reduce the deficit by $4 trillion over the next decade. Three quarters of those savings would be achieved through spending cuts and the rest through higher taxes.

341Email Print CommentThe 18-member commission, which will make formal recommendations to Obama on Dec. 1, has been closely watched by budget experts since its first meeting in April.

The panel's proposals are not likely to be adopted by Congress wholesale, but they are expected to influence the debate in coming months as Congress tackles the nation's unsustainable long-term debt.

In their report, Bowles and Simpson offer ideas for consideration by the commission:

Set targets for revenue and spending: The report recommends that taxes be capped at 21% of gross domestic product. It would also limit federal spending initially to 22% of the economy and eventually to 21%.

Rein in spending: The report proposes $200 billion in domestic and defense spending cuts in 2015. (Deficit fighting: The first cut is the deepest)

Reform tax code: The report would lower income tax rates and simplify the tax code. It would abolish the Alternative Minimum Tax -- the so-called wealth tax -- and reduce tax breaks.

Change Social Security: The report aims to make Social Security solvent over 75 years through a number of measures, including a less generous annual cost-of-living adjustment for benefits, and a very slow rise in the retirement age (from 67 to 68 by 2050; rising to 69 by 2075).

Take the CNNMoney Social Security Quiz
"America cannot be great if we go broke," wrote Bowles, former White House chief of staff under President Clinton, and Simpson, a former Republican senator from Wyoming.

The full panel will vote on the recommendations by Dec. 1, the date of the commission's last public meeting.

Most observers and commission members -- including 12 sitting lawmakers -- have been pessimistic that the panel will be able to generate the 14 of 18 votes needed to make any official recommendation to Congress, which would put it up for a vote.

'This is just the beginning'
The White House said Wednesday that Obama would not comment until the commission finishes its work in several weeks, calling the report "a step in the process."


0:00 /2:44Bowles: 'Headed for disaster'
The commission met Wednesday morning to discuss the Bowles-Simpson report. Initial public reaction from members ranged from guardedly positive to negative.

"This is not the conclusion of the commission's work. This is the beginning," said Senate Budget Chairman Kent Conrad, a Democrat from North Dakota, who nevertheless commended Bowles and Simpson for putting together a "serious proposal."

Fellow commission member Judd Gregg, the top Republican on the Senate Budget Committee who co-authored a bipartisan tax reform proposal cited in the draft, characterized the report as an "aggressive and comprehensive plan ... I look forward to reviewing it in depth and hopefully improving on it."

Other members were more blunt.

"This is not the way to do it," said Rep. Jan Schakowsky, a Democrat from Illinois.

Senate Finance Committee Chairman Max Baucus, a Democrat from Montana, says he has "significant concerns" with the proposal and "can't support it now."

Meanwhile, Maya MacGuineas, who runs the nonpartisan Committee for a Responsible Federal Budget, called the report "remarkable."

"In a period when there has been little good news on the deficit and debt front, this is truly a most encouraging sign."

-- CNN congressional producer Ted Barrett contributed to this report.

http://money.cnn.com/2010/11/10/news/ec ... gletoolbar